How does salary work lead dev 2019 extended remix (fixed)
An updated version of the other deck (https://www.slideshare.net/kevingoldsmith/how-does-salary-work-the-lead-developer-berlin-2019-extended-remix) with a typo fixed and some unnecessary transition slides removed. Slideshare has removed the ability to update slides. You make a hire for your team. The person wants 20% more than anyone else. Should you give it to them? Your manager gives you a 5% raise budget for your team. Do you give them all 5% or give one person 15% and the rest 1%? You think you are giving a great raise to one of your top performers, but they let you know that they expected much more. A person on your team approaches you because they got a job offer for 10% more than their current salary. Should you try to match it? The management debt that gets accrued by poor decisions around salary is extremely painful to fix. In this talk, I will give you the tools and ideas that you can use to be well prepared for the next salary review. I will help you avoid accruing management debt around pay in your team. How is the salary budget calculated? How you can argue for the extra budget to adjust someone that is not being paid well. Where you can find extra money to make a meaningful difference for someone. Why sometimes it is better to do no raise at all, then do a small one. How you handle the conversation when someone isn't happy with their increase. How do you decide what salary to offer a candidate? How can you make sure that you are not increasing pay disparity between different groups? These are problems that Dev Leads face all the time. The impact of making a wrong decision is massive to an individual. The mistake of paying someone too little or too much can affect them for years. Understanding how salary works helps you create a happier and healthier team. [This talk was given at The Lead Developer conference in Berlin, Germany on December 6, 2019. The slides here include sections of the presentation that I had to cut for time.]
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How does salary work lead dev 2019 extended remix (fixed)
- 1. Kevin Goldsmith Chief Technology Officer How Does Salary Work?
- 2. @KevinGoldsmith Where do salary numbers come from? The budget
- 3. Benchmarks salaries Decides which projects to fund for next year Q3 People Team Leadership Team
- 4. Benchmarks salaries Estimates Revenue for next year and staff costs Decides which projects to fund for next year Q3 People Team Leadership Team Finance Team
- 5. Benchmarks salaries Estimates Revenue for next year and staff costs Decides which projects to fund for next year Q3 People Team Leadership Team Finance Team Leadership Team Decides how many people to hire for next year
- 6. Q4 Leadership Team Decides how many people to hire for next year
- 7. Generates Budget Q4 Leadership Team Decides how many people to hire for next year Finance Team
- 8. Generates Budget Q4 Reviews and updates budget, including hiring plan Leadership Team Decides how many people to hire for next year Finance Team Leadership Team
- 9. Q4 Reviews and updates budget, including hiring plan Leadership Team
- 10. Q4 Reviews and updates budget, including hiring plan Approves Budget Leadership Team Board of Directors
- 11. Q4 Reviews and updates budget, including hiring plan Approves Budget Leadership Team Board of Directors Finance Team Generates a hiring and salary review plan
- 12. Q4 Finance Team Q1 Generates a hiring and salary review plan
- 13. Q4 Finance Team Q1 Generates a hiring and salary review plan You! You get to hire, promote and give raises!
- 14. Q4 Finance Team Q1 Generates a hiring and salary review plan You! You get to hire, promote and give raises!
- 15. @KevinGoldsmith It’s a waterfall process!
- 16. @KevinGoldsmith What is the cost of an employee?
- 17. The “fully loaded” cost of an employee: Salary Benefits (insurance, taxes, stock) Travel Training Future raises Termination
- 18. @KevinGoldsmith This is why you can’t magically turn one budgeted headcount into two at half the salary each.
- 19. @KevinGoldsmith This is why you can’t magically turn one budgeted headcount into two at half the salary each. * in many companies *
- 20. @KevinGoldsmith This is also why you need to think in terms of more than salary when making an offer or doing a performance review.
- 22. @KevinGoldsmith Things to consider ● Their current salary ● Their previous salary (potentially) ● Their experience ● Your company’s stage of growth ● Your companies’ salary bands for the role/level ● The scarcity of the skills needed for the role ● Your budget for the role ● If they are a member of an under-represented group ● When is their next pay review?
- 23. @KevinGoldsmith Things not to consider ● What others on the team make ● How long it has taken you to fill this role ● How much you make
- 24. @KevinGoldsmith The best way for you to improve your salary is to hire the most talented people you can.
- 25. @KevinGoldsmith But remember: people are motivated by more than money!
- 26. @KevinGoldsmith Leveraging things other than salary ● Benefits (stock growth opportunity, learning credits…) ● Learning Opportunities (role/responsibility growth opportunities) ● Interesting technology challenges ● Career-change ● Company culture
- 27. @KevinGoldsmith Leveraging things other than salary But then you have to deliver on those promises!
- 28. @KevinGoldsmith What job is this job setting you up for?
- 30. @KevinGoldsmith Salary is about performance. Stock options are about future potential.
- 31. @KevinGoldsmith Salary is about performance. Stock options are about future potential. * in many companies *
- 32. @KevinGoldsmith Things to consider ● Their performance relative to their role/level ● Their place in the salary band ● Their previous raises ● Their velocity ● Are you promoting them? ● Your total salary budget
- 33. @KevinGoldsmith The larger your team is, the closer you should be to hitting your budget exactly.
- 34. @KevinGoldsmith Common mistakes Everyone has “over- performed” relative to expectations
- 36. @KevinGoldsmith Common mistakes Giving a tiny (<2%) raise
- 37. @KevinGoldsmith A small deduction in the raise of someone making a lot can be a big raise to someone making little. Quick tip
- 38. @KevinGoldsmith Rounding down to an even Euro amount for someone, can be a big percentage increase for someone else Quick tip
- 39. What if my manager lowers the raise I wanted to give after I submitted it?
- 40. What if someone is really underpaid and I want to fix it?
- 41. What if someone makes more than the top of the salary band, but I still want to give them a raise?
- 43. @KevinGoldsmith Things to consider ● The salary review conversation is not a negotiation (in most companies and cultures) ● You are representing the company, be prepared to defend the numbers (even if you disagree) ● Your message should be consistent with your performance guidance through the year ● Do not make a promise you can’t keep (“if you do <X> this next period I will get you that raise”)
- 44. What if? “I’ve got an offer for <X>, will you match it?”
- 45. What if? “My friend in <other group> got a bigger raise. I am better than them, I should get at least that much.”
- 46. What if? “What do I need to do in order to get a bigger raise next time?”
- 47. @KevinGoldsmith Making sure that salaries are fair
- 48. It is critical that salaries and raises are done in a consistent way across the organization
- 52. @KevinGoldsmith If your manager isn’t doing this, you and your peers can do it yourselves!
- 53. @KevinGoldsmith We can fix a lot of the mistakes we make as managers, but a mistake in compensation can have lifelong consequences
- 54. @KevinGoldsmith Make the effort to do it right.